Rumble Coffee Roasters has released its 2019 Transparency Report, revealing an average price of $7.99 per kilogram paid for its coffee last year.
This marks a 16 per cent increase over 2018, and sits well above the average commodity price, which Rumble identifies as $3.39 per kilogram.
The report is part of Rumble’s Transparency Project model, making its pricing data available to the public and detailing its efforts to address key threats to the sustainability and longevity of the coffee industry.
“We began Rumble with a single goal: to improve the industry from the inside out, all the way from producer to the consumer. Perhaps the biggest part of this process, for us, is publishing and openly discussing the prices we pay for our coffee,” Rumble Coffee Head Roaster/Green Buyer Matt Hampton says.
Rumble estimates the cost of specialty coffee production as at least US$1.50 per pound, or AU$4.70 per kilogram, which the report says makes clear “we’re still facing a coffee pricing crisis”.
“With the cost of production well above the C-market value, nobody knows how many farmers have walked away from farms or pulled up their coffee to try another crop,” Matt says.
Another sore point the report identified is the Australian Dollar having weakened against the US Dollar by around 10 per cent since 2018. As all coffee is traded in USD, the report says the impact on purchase price can’t be underestimated.
“A challenge like this has put pressure on the Australian coffee market as a whole with many roasters feeling the need to buy lower-quality coffee and the average consumer becoming unwilling to pay any more for the produce they receive,” Matt says.
“Importantly, we have a central aim to help redefine the categorisation of ‘specialty coffee’, highlighting the role played by [Free On Board] (FOB) price in a fair price paid at origin. We want farmers to experience clear incentives for producing better coffee, doing the right things on their farms and in their communities; and at the core of it, for farmers never to be underpaid by other players seeking exploitation in the name of making a quick buck.”
Rumble has focused its transparency on the FOB price, describing the price paid at origin, or the value of the coffee as it sits in freight, about to leave the place in which it was grown. It chooses this metric because it more easily facilitates transparency in data-sharing.
By recognising FOB price, the roaster can start to understand the supply chain and make more educated decisions using this knowledge.
“We think it’s important to recognise that the FOB price doesn’t tell the full story about how much the farmer receives. Without breaking down that total cost to the consumer, there’s the possibility that suppliers lay claim to a costly ‘specialty’ coffee,” Matt says.
When possible, Rumble has also included the farm-gate pricing data, the price the farmer receives for their coffee as it leaves their farm. It plans to publish more farmgate data in 2020 as it learns more about how to translate the information and make it clearer to understand.
Rumble has not included the cost of production in its report as this will differ from country to country and producer to producer, and is difficult to individually calculate. However, it says another recent report measured the cost of producing coffee to sit between US$1.05 and US$1.40 USD per pound.
For more information, visit www.rumblecoffee.com.au/pages/2019
